Business Studies · Financial Management
Under which of the following situations should a company avoid raising capital through debt?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
Share:
- 1When the stock market is experiencing a severe depression phase
- 2When the return on investment (ROI) is significantly higher than the rate of interest
- 3When the corporate tax rate is low, reducing the tax-shield benefit✓
- 4When the company's cash flow position is highly stable and strong
Correct answer
When the corporate tax rate is low, reducing the tax-shield benefit
Download Single Question PDF
Save this question and verified answer as a clean study sheet with live clickable link.
👥
Share with Friends & Study Groups
Challenge your peer aspirants on WhatsApp or Telegram to solve this question!
Online Test Series
Start Free Mock Test →Preparing for Business Studies?
Practice full-length mock tests with real exam timers, instant score analysis, and all-India ranking.
Chapter Practice
Practice Financial Management MCQs →Want more practice questions on Financial Management?
Solve complete topic-wise tests with detailed solutions on GkGet.
Related Practice Questions
Recommended practice questions in Business Studies · Financial Management